Defense bill reauthorizes MSP program through 2025

Monday, January 07, 2013

President Obama last week signed the National Defense Authorization Act, which will reauthorize the Maritime Security Fleet Program (MSP), providing financial support to 60 ships to partially offset higher operating costs under the U.S. registry.
Sen. Frank Lautenberg, D-N.J., said in a press release that the law will provide certainty to the military and ship owners by reauthorizing the program through 2025.
But Liberty Maritime, a New York-based shipowner, said it was disappointed in a decision by a conference committee in Congress "to
preclude greater participation by American carriers in a vital American
national security program. Congress missed an opportunity to open the
program to transparent and accountable competition and to reduce the
unhealthy domination of the program by foreign-owned companies, which
control more than 80 percent of the contracts. American carriers have
demonstrated that they perform at the highest level and the most
competitive price, but they will be denied the opportunity for greater
participation under the legislation until 2025.”
Liberty has complained that the law "grandfathered" the existing contractors and eliminated the preference in existing law for U.S. citizens as defined in Section 2 of the Shipping Act, 1916.
In a letter sent to the Maritime Administration in November, Liberty's attorney, Constantine Papavizas of Winston & Strawn, said the Transportation Department agency has violated the law and demanded it take corrective action.
If not, Liberty has said it may sue the agency. While it originally said it would file a suit in late November, Liberty has held off on any legal action.
"We will see what they do. If they chose to ignore us, then we will be in court. If they chose to agree with us then we might not be in court," said Papavizas last week. - Chris Dupin